We use cookies to customise content for your subscription and for analytics.If you continue to browse Lexology, we will assume that you are happy to receive all our cookies. For further information please read our Cookie Policy.

New Investment Canada Act Review Threshold - C$1 Billion

On June 22, 2017, the pre-closing review threshold that applies to most direct acquisitions of Canadian businesses by non-Canadian1, non-state owned investors from WTO member states increased to C$1 billion from the $C800 million2. In an effort to encourage foreign investment that is beneficial to Canada, the Canadian Government increased this threshold to C$1 billion two years ahead of schedule3.

The C$379 million (2017) pre-closing review threshold for direct acquisitions of Canadian businesses by non-Canadian, state-owned investors continues to apply4. Also continuing to apply is the C$5 million pre-closing threshold for direct transactions that relate to cultural businesses or where the buyer is from a non-WTO member state and the seller is either from a non-WTO member state or from Canada.

It is worthwhile to remember that the Canadian government can review any investment (including minority investments) by non-Canadians on the basis of “national security” concerns. No financial threshold applies. The government has 45 days after the certified date of a notification or application for review to provide notice of a potential national security review. Therefore, if a proposed transaction that is not otherwise subject to approval raises national security concerns, parties should consider filing a notification as early as possible in order to obtain pre-merger clearance (or at least trigger the review period prior to closing) in respect of any acquisition of control of a Canadian business by a non-Canadian (that is not otherwise subject to review and approval).

To view all formatting for this article (eg, tables, footnotes), please access the original here.